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Stubborn Jobless Rate Shows 'Growth Focus' Need

By NEIL HARTNELL

and NATARIO McKENZIE

Tribune Business Reporters

The Bahamas needs a "more significant focus" on economic growth to further dent a national unemployment rate that remains stubbornly flat - and high - at ten percent.

Robert Myers, the Organisation for Responsible Governance's (ORG) principal, yesterday suggested the May Labour Force survey results show that while the economy is growing fast enough to absorb new workforce entrants, it is not expanding quickly enough to achieve both this and reduce the existing numbers of unemployed.

With one in ten Bahamians seeking work still unable to find it, Mr Myers called for a renewed focus by government on pro-GDP growth policies that improve the ease, and reduce the cost, of doing business for local firms.

"In my opinion, clearly the focus on growth needs to be more significant," he told Tribune Business, "and that means focus on the ease and cost of doing business must be more significant.

"It's an indication that GDP is not growing fast enough. We obviously need to see that [unemployment] number decline. There's a correlation between employment and GDP, with growth in the latter being a good thing.

"We need GDP growth to be about 5.5 percent, but we're not going to get there overnight. Ideally, you'd like to see 2-3 percent to get the economy really moving."

While 4,525 more Bahamians had found employment between November 2017 and May 2018, the Department of Statistics data showed this was barely keeping up with the eligible labour force's 4,765 expansion over the same period. In other words, the new jobs created were still not sufficient to satisfy everyone coming into the labour force.

The 10 percent national unemployment rate was flat with both November 2017's 10.1 percent rate, and last May's 9.9 per cent, showing the level of joblessness has stubbornly refused to budge under the Minnis administration to-date.

A decline in New Providence's unemployment rate, from 10.6 percent in November 2017 to 10 percent in May 2018, drove the slight improvement in the national figures. However, the rates fro Grand Bahama and Abaco rose over that same period from 12.1 percent to 12.4 per cent, and from 8.6 percent to 10.7 percent, respectively.

Dion Foulkes, minister of labour, said the results were not surprising, with the New Providence improvement likely associated with hirings at Baha Mar as it opened both the SLS and Rosewood properties. However, he expressed serious concern over the rise in youth unemployment and discouraged workers.

"I think that based on what happened at Baha Mar, we sort of had a good idea that the unemployment rate in New Providence would have decreased significantly," Mr Foulkes said. "We are concerned about youth unemployment and the amount of discouraged workers.

"The $50 million programme we have initiated in conjunction with the Inter-American Development Bank (IDB) to embark on a comprehensive skills programme will go a long way to equipping young people to qualify for the skills in the market place."

The youth unemployment rate, encompassing persons aged between 15 to 24 years-old, rose over the six-month period from 22.1 percent to 24.1 percent. In this age bracket, which typically exhibits the highest jobless rate, more than one in five Bahamians looking for work cannot find it.

Discouraged workers, meaning persons who have stopped seeking work because they believe none is available, increased by 6.9 percent to 2,175. New Providence and Grand Bahama saw increases of 7.3 percent and 2.5 percent, respectively, while Abaco's numbers dropped by 2.5 percent.

The May figures do not account for the several thousand school leavers who typically swell the workforce's ranks when they leave high school, and return from college, every year. Nor does it include the impact of the late May Budget, and its VAT hike and other tax changes, which are likely to impact economic activity and the willingness of Bahamian companies to hire new workers.

For those reasons, Mr Myers suggested the November 2018 and May 2019 surveys will provide a better picture of unemployment in the Bahamas as more - and better - data will likely be available.

He attributed the increase in youth unemployment and discouraged workers to a "massive skills gap" between what employers are looking for and what high school leavers are equipped with. Calling for a renewed focus on vocational training and apprenticeship programmes, Mr Myers said ORG was working with the Department of Labour to conduct a "skills gap needs analysis before the end of the year".

Meanwhile, the Labour Force Survey showed vulnerable employment declining by 10 per cent from 16,370 to 14,740. The rate now stands at 7.1 percent of total employment. These workers as defined by the International Labour Organisation as less likely to have formal worker arrangements, and more likely to lack decent working conditions characterised by inadequate earnings and benefits.

The Opposition's deputy leader, Chester Cooper, said the survey revealed troubling indicators demonstrating that the Minnis administration's "reckless policies are coming home to roost".

"While the level of employed persons is up as a result of Baha Mar, the level of unemployed is a reflection of the FNM doing everything in its power to depress the workforce and the overall economy. Whilst unemployment overall didn't move significantly in any direction, unemployment on Grand Bahama and Abaco is up. Unemployment among youths is also up," said Mr Cooper.

"This is most disturbing given that thousands of young Bahamians graduated high school and college just after the date of this report."

Mr Cooper added: "Perhaps most concerning is that discouraged workers have increased across the board, and are pessimistic about the prospect of finding work. The FNM can take credit for embedding a sense of hopelessness in the country.

"So much so that many people no longer feel there is work to be had. Had these discouraged workers been counted among the unemployed, the unemployment rate would have been much higher."

Comments

killemwitdakno 9 months ago

The 10% jobs are there. They're given to permitters whikst we're giving $65M for 500 so called jobs at Lucayan.

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